CLA-2 OT:RR:CTF:TCM H076723 DAC
Port Director
U.S. Customs and Border Protection
Port of St. Albans
50 S. Main Street Suite 100R
St. Albans, VT 05478
RE: Application for Further Review of Protest No. 0201-09-100018; Classification of manual reefing systems, and fittings.
Dear Port Director:
The following is our decision regarding the Application for Further Review (AFR) of Protest No. 0201-09-100018, filed on June 23, 2009, on behalf of protestant, Wichard Inc. (Wichard), against U.S. Customs and Border Protection's (CBP) classification of the manual reefing systems and fittings for sail boats. We have considered arguments presented in a telephone meeting with counsel for protestant on September 2, 2010, as well as the supplemental submissions of August 31, 2010, September 22, 2010, November 2, 2010, and November 22, 2010.
FACTS:
The subject protest concerns one entry of merchandise, entered on January 14, 2008, and liquidated on December 29, 2008. The merchandise subject to the protest includes the manual reefing systems and fittings for sailboats.
Manual Reefing Systems
The subject merchandise consists of the manual reefing and furling systems. All four reefing systems are machines that may be described in the same or a substantially similar manner. The model numbers indicate the size of the particular system. For instance, the LC42-18m manual reefing and furling system measures 18 meters in length, with a clevis pin 5/8 inch in diameter. The reefing systems are used on sailboats to handle the operations of a headsail on a sailboat. Reefing systems are used to aid in the trimming, furling and unfurling of sails. The systems are designed to adjust a sail to the user's choice of tension or length by winding or unwinding the sail around a rotating shaft. The reefing and furling systems do not lift or hoist the sail but rather serve to wind and unwind the sail from the shaft.
At the time of importation, the LC 42 manual reefing and furling system consists of the drum system and additional components that are used to assemble the aluminum extrusion section after importation. Incorporated into the drum section are carbon steel housings which include ball bearings in a grease-bath that withstand most of the workload when the headsail is unfurled and in operation. This section is sealed as a protection against the elements. The ball bearings perform an important function, as they withstand most of the workload when the headsail is unfurled and in operation. A stainless steel cage arm surrounds the plastic drum to prevent the line from leaving the drum. The drum and steel cage are attached to an end-stay fitting that attaches to the boat. All four reefing systems are machines that may be described in the same or a substantially similar manner.
The subject reefing and furling systems were entered in heading 8425, HTSUS, the provision for “Pulley tackle and hoists …; winches and capstans.”
Fittings for sailboats
The subject fittings were entered in heading 7326, HTSUS, as "other articles of ... steel".
CBP issued a Request for Information (CPB Form 28) on June 4, 2008, regarding the nature of the shackles at issue. Importer responded to this request on June 23, 2008, stating all merchandise liquidated under heading 8302 was under protest. However, in the follow up letter of July 14, 2009, the importer noted that the protest and AFR involve the classification of three types of fittings, to include snap shackles, captive pin shackles, and self-locking shackles. In a submission of September 22, 2010, the importer states that the subject merchandise consists of the following types of fittings, which are referred to by Wichard as "shackles". These fittings include snap shackles, captive pin shackles, self-locking shackles, allen head pin shackles, HR shackles, and roller fittings. The importer also states the following:
Snap shackles are used to attach structural fittings together on a pleasure yacht. The snap shackle allows for cosy and quick attachment and disengagement of the fittings.... A snap shackle can be used to attach to any part of the boat structure or sails. Anywhere where a structural attachment needs to be made .... The function of a Captive Pin Shackle is to connect load bearing equipment together on a pleasure yacht. …
Shackles can be used on any part of the boat's deck, mast, or inside the cabin. Anywhere where structural connection needs to be made, including the anchor.
CBP issued a Notice of Action (CF29), dated July 1, 2008, for a rate advance. The subject entry was liquidated on December 26, 2008, in heading 8302 HTSUS, as base metal fittings, and heading 8479, HTSUS, as machinery and mechanical appliances having individual functions, not specified or included elsewhere in this chapter. This Protest and AFR were filed on June 23, 2009, contending that the manual reefing systems were properly classified in heading 8428, HTSUS, as lifting machinery, or, in the alternative, as entered in heading 8425, HTSUS. Protestant maintains that the fittings are properly classified as entered.
The roller fitting is imported in an unfinished condition. The unfinished roller fitting is 2 5/8 inches long and 1 3/8 inches wide. The finished roller fitting is 2 1/2 inches long and 1 1/8 inches wide. The finished roller fitting has an eye at one end and is “U”-shaped at the other end with a plastic covered rolling metal axel connecting the two ends of the open end of the “U”. The unfinished roller fitting has an eye at one end and has no opening to create a U-shape, although the U shape is filled with a thin flat piece of metal that closes the (future open space of the) much wider “U” shaped frame. The unfinished roller fitting has no plastic materials, it is all steel. Roller fittings may normally be used to connect the static line on a parachute to the inside of an aircraft fuselage. The roller fittings that are imported require some limited work in order to make them into the finished articles.
Protestant submits a CF 29, Notice of Action, dated October 29, 1996, which states:
PLEASE NOTE THE CORRECT CLASSIFICATION FOR FUTURE ENTRIES.
* * * * *
TOERAIL PADEYE ENTERED UNDER 8302.49.6055/ 5.7% IS CLASSIFIED UNDER 7326.9085.85/4.6% AS OTHER ARTICLES OF STEEL.
Protestant submits additional evidence that it has entered this merchandise in subheading 7326.90.85, HTSUS, consistently for at least two years prior to the instant entry and this treatment has been conferred pursuant to 19 U.S.C. § 1625(c) by CBP.
ISSUES:
1. Whether the subject manual reefing and furling systems are classified under the heading 8425, HTSUS; as hoists or winches, under heading 8428, HTSUS, as lifting machinery or under heading 8479, HTSUS, as other machinery and mechanical appliances having individual functions, not specified elsewhere.
2. Whether the subject fittings for sailboats are classified under heading 7326, HTSUS, as other articles of iron or steel, or under heading 8302, HTSUS, as base metal mountings, fittings and similar articles.
3. Whether to grant protestants claim of treatment under 19 U.S.C. §1625(c)(2) for the importation of shackles under subheading 7326.90.85, HTSUS.
LAW AND ANALYSIS:
The matter is properly subject to protest under 19 U.S.C. §1514(a)(2) as a decision on classification and the rate and amount of duties chargeable. The protest was timely filed on June 23, 2009, within 180 days of the above referenced liquidation, pursuant to 19 U.S.C. § 1514(c)(3).
Further review is claimed pursuant to Section 174.24(b) of the CBP Regulations (19 C.F.R. § 174.24(b)) as protestant alleges that the matter involves questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context, which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to the GRIs.
The HTSUS provisions under consideration are the following:
7326 Other articles of iron or steel:
7326.90 Other:
Other:
Other:
7326.90.85 Other
* * * * *
8302 Base metal mountings, fittings and similar articles suitable for furniture, doors, staircases, windows, blinds, coachwork, saddlery, trunks, chests, caskets, or the like; base metal hat racks, hat-pegs, brackets and similar fixtures; castors with mountings of base metal; automatic door closers of base metal; and base metal parts thereof:
Other mountings, fittings and similar articles, and parts thereof:
8302.49 Other:
Other:
8302.49.60 Of iron or steel, of aluminum or of zinc
* * * * *
8425 Pulley tackle and hoists other than skip hoists; winches and capstans; jacks:
Pulley tackle and hoists other than skip hoists or hoists of a kind used for raising vehicles:
8425.19.00 Other
Winches; capstans:
8425.39.01 Other
* * * * *
8428 Other lifting, handling, loading or unloading machinery (for example, elevators, escalators, conveyors, teleferics):
8428.90.01 Other machinery
* * * * *
8479 Machinery and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:
Other machines and mechanical appliances:
8479.89 Other:
8479.89.98 Other
* * * * *
Section XVI, Notes 3 and 4.
3. Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principle function.
4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered buy one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.
Chapter 84, Note 7.
7. A machine which is used for more than one purpose is, for the purposes of classification, to be treated as if its principal purpose were its sole purpose. Subject to note 2 to this chapter and note 3 to section XVI, a machine the principal purpose of which is not described in any heading or for which no one purpose is the principal purpose is, unless the context otherwise requires, to be classified in heading 8479. Heading 8479 also covers machines for making rope or cable (for example, stranding, twisting or cabling machines) from metal wire, textile yarn or any other material or from a combination of such materials.
In interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The relevant EN provisions for GRI 2 provide in pertinent part:
RULE 2 (a)
(Incomplete or unfinished articles)
(I) The first part of Rule 2 (a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.
(II) The provisions of this Rule also apply to blanks unless these are specified in a particular heading. The term "blank" means an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into the finished article or part (e.g., bottle preforms of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape).
* * * * *
The relevant EN provisions under heading 8425 provide in pertinent part:
This heading covers simple lifting or handling equipment.
The heading covers:
(I) PULLEY TACKLE AND HOISTS OTHER THAN SKIP HOISTS
The pulley tackle and hoists classified in this heading consist of more or less complex systems of pulleys and cables, chains, ropework, etc., designed to give a mechanical advantage to facilitate lifting (e.g., by use of pulleys of different diameter, toothed wheels, gearing systems).
Separately presented pulleys and pulley blocks are excluded (heading 84.83). Davits, also included in this heading, consist of twin tipping or swivelling supports from which ships’ boats, etc., may be raised or lowered by means of pulley tackle type hoisting gear.
(II) WINCHES
Winches consist of hand-operated or power-driven horizontal ratchet drums around which the cable is wound.
* * * * *
(1) Marine winches ... for operating cargo lifting gear, raising anchor,...
* * * * *
The relevant EN provisions under heading 8428 provide in pertinent part:
The heading covers lifting or handling machines usually based on pulley, winch or jacking systems, and often including large proportions of static structural steelwork, etc.
* * * * *
These more complex machines include:
(I) INTERMITTENT ACTION MACHINES
(A) Lifts are usually operated by winch and cable, or by rams worked by water, air or oil. They are used for raising or lowering a passenger cage or goods platform between vertical guide bars, and are generally fitted with counter-balance weights. The control, stopping, safety, etc., equipment, whether or not electrical, is also classified in this heading provided it is presented with the lift itself. The heading also includes manually operated lifts.
* * * * *
The group also includes so-called “ship-lifts”, i.e., very powerful hydraulic or jack operated installations for lifting a vessel and lock basin complete from one canal level to another, and thus replacing normal locks.
(B) Skip hoists are a type of lift in which bulk material containers are hoisted up a ramp or vertical shaft. They are used for raising coal from mines, for hoisting ores, limestone, fuel, etc., into blast furnaces, lime kilns, etc.
* * * * *
The relevant EN provisions under heading 84.79 provide in pertinent part:
This heading is restricted to machinery having individual functions, which:
(a) Is not excluded from this Chapter by the operation of any Section or Chapter Note.
and (b) Is not covered more specifically by a heading in any other Chapter of the Nomenclature.
and (c) Cannot be classified in any other particular heading of this Chapter since:
(i) No other heading covers it by reference to its method of functioning, description or type.
and (ii) No other heading covers it by reference to its use or to the industry in which it is employed.
or (iii) It could fall equally well into two (or more) other such headings (general purpose machines).
* * * * *
Reefing Systems
There is no dispute that each of the manual reefing and furling system, as described above, is a machine for tariff purposes as the system acts on the sails through the use of transmitting force, motion, and energy. The importer agrees that the
system is a machine for purposes of Section XVI, and for purposes of Chapter 84, HTSUS.
The manual reefing and furling systems, also referred to by Wichard as the “LC 42” manual reefing system, are used on sailboats to handle the operations of a headsail on a sailboat. Reefing systems are used to aid in the trimming, furling and unfurling of sails. However, protestant argues that certain New York Ruling Letters (NY) classify similar merchandise under protestant's claimed provisions. For instance, protestant cites to NY 804091, dated December 9, 1994, which classified a “Mast Lift” and to NY 885105, dated May 3, 1993, which classified a “Dinghy-Tow”, under heading 8425, HTSUS, as hoisting devices. In NY 804091, the “Mast Lift” was a hoisting device with a gear that is used to pull oneself to the top of a mast. In NY 885105, the “Dinghy-Tow” is used on sailboats to lift and store an inflatable dinghy by allowing the user to easily lift the dinghy. The manual reefing and furling systems perform the furling and unfurling of sails. The manual reefing and furling systems do not perform lifting, they are not lifting devices and they are not hoists. The manual reefing and furling systems adjust a sail to the proper tension or length by winding or unwinding the sail around a rotating shaft. The components of the manual reefing and furling systems are for winding. Winding is distinctly different from lifting or hoisting. The manual reefing and furling systems perform a specialized winding and unwinding service, the furling and unfurling of sails. The subject merchandise does not perform the vertical lifting service described within the meaning of the ENs for heading 8425. The subject merchandise is for winding sails and does not perform a vertical lifting service.
Protestant references a definition of winch from the American Heritage Dictionary, which states that a winch is “A stationary motor-driven or hand-powered machine used for hoisting or hauling, having a drum around which is wound a rope or chain attached to the load being moved.” Although this definition may describe some characteristics of the subject merchandise, it does not describe its function. The instant merchandise does not hoist or haul or function as a marine winch. It does not lift cargo, or raise anchors, or perform other vertical lifting functions. The function and action of the instant merchandise does not comport with the EN for heading 84.25 or the dictionary definition.
In the alternative, protestant proposes classification under heading 8428, HTSUS. The subject merchandise does not include large portions of static structural steel work, and does not perform vertical lifting, as described by the ENs for heading 8428, HTSUS. Protestant references a definition of “hoist” from the AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE, Fourth Edition, which states that a hoist is “1. An apparatus for lifting heavy or cumbersome objects, and 2. The act of hoisting; a lift. To hoist is defined as to raise or haul up with or as if with the help of a mechanical apparatus.” Although this definition may also describe some characteristics of the subject merchandise, it does not describe the service provided by the subject reefing and furling systems fully. This definition further makes clear the requirement of lifting upward or vertically. Hence, the definitions found in the ENs and dictionary do not support Protestant’s argument for classification in heading 8428, HTSUS.
In the submission of August 31, 2010, the protestant cites to dicta in Mitsubishi International Corporation v. United States, 22 C.I.T. 324, 5 F. Supp. 991 (1998), in support of classification of the “LC 42” reefing system under heading 8428, HTSUS, that states that heading 8428, HTSUS, applies to a wide range of merchandise. As the case discussed substantially different merchandise (a steel casting machine), we find the reference unhelpful in determining classification of the instant merchandise.
In the submission of August 31, 2010, the protestant cites to ruling NY N092878, dated February 25, 2010, which classifies a device that lifts aluminum plates under heading 8428, HTSUS. The protestant also cites to ruling NY N092699, dated February 25, 2010, which classifies a device that lifts a patient under heading 8428, HTSUS. These devices are lifting devices, and are different from the subject merchandise.
The protestant agrees with CBP that the manual reefing and furling systems are classified under Chapter 84, and that the subject systems are machines for purposes of Section XVI, and Chapter 84. Within the meaning of Section XVI, Note 4, (set forth above), the subject merchandise consists of components that are interconnected and intended to contribute together to the winding and unwinding sails. The manual reefing and furling systems are not excluded from classification within Chapter 84, HTSUS, pursuant to the Section XVI and Chapter 84 notes, and since the merchandise is not more specifically covered by another heading in the HTSUS, (See Chapter 84, Note 7), the manual reefing and furling systems, are classified under the terms of the heading 8479, HTSUS.
Fittings
The subject protest also includes fittings for sailboats. These fittings are described as "shackles," by protestant, and include: snap shackles, captive pin shackles, self-locking shackles, allen head pin shackles, HR shackles and roller fittings. Specific identifiers and descriptions of these fittings are included in the list of articles appearing on the invoice descriptions. The fittings under protest may be used on sailboats as anchor shackles or shackles securing sails to the boat.
Protestant cites to NY N023468, dated February 28, 2008, which classified an "anchor shackle, a grab hook, rope clamps, ... all composed of zinc-plated steel" and to NY A86913, dated September 9, 1996, which classified a "screw pin anchor shackle", under heading 7326, HTSUS. The anchor shackle in NY N023468 was used to connect chain to a rope. The screw pin anchor shackle in NY A86913 was used with a mechanical lifting device to provide flexibility and strength in an overhead lift. Protestant fails to explain the relevance of these rulings on different merchandise to the subject merchandise. Therefore the rulings are distinguishable.
In the submission of September 22, 2010, the protestant claims that the fittings “become permanent or semi-permanent parts of the sail boat once brought aboard.” In accordance with the Additional U.S. Rules of Interpretation 1(c) “a provision for parts of an article covers products solely or principally used as a part of such articles but a provision for “parts” or “parts and accessories” shall not prevail over a specific provision for such part or accessory”. We note the subject fittings are not imported along with and attached to sailboats. The subject fittings are imported as individual articles.
These fittings for sailboats may be referred to as fittings or mountings. These fittings for sailboats meet the terms of heading 8302, HTSUS, because they are mountings or fittings suitable for use on sailboats.
In HQ W967544, dated June 24, 2005, CBP addressed heading 8302, HTSUS, the ENs for heading 8302, and the meaning of “mounting” and “fitting” as follows:
“Because neither the HTSUS nor the ENs define the terms mountings and fittings, we have looked at the standard dictionary definitions for these terms to determine whether the diesel motor support bearings are classifiable in heading 8302, HTSUS. Webster's New World Dictionary, Second College Edition, 1974 defines the word fitting as: ...2. a small part used to join, adjust, or adapt other parts, as in a system of pipes 3. [pl.] the fixtures, furnishings or decoration of a house, office, automobile, etc.”
“The web site Dictionary.com defines the word mounting when used as a noun as: 1. The act or manner of mounting. 2. A means of conveyance, such as a horse, on which to ride. 3. An opportunity to ride a horse in a race. 4. An object to which another is affixed or on which another is placed for accessibility, display, or use, especially: a. A glass slide for use with a microscope. b. A hinge used to fasten stamps in an album. c. A setting for a jewel. d. An undercarriage or stand on which a device rests while in service.”
As described by Protestant, the fittings are used to join or adapt other parts, and are an object to which another is affixed. Based on the discussion and dictionary definitions in ruling HQ W967544 (June 24, 2005), we determine that the instant fittings or “shackles” meet the terms “mountings, fittings and similar articles” of heading 8302, HTSUS.
Additionally, in HQ 953376, dated May 14, 1993, CBP stated, “although not specifically named, boat fittings would be included within the heading [8302], because boats are for water conveyance which is similar to land conveyance by automobiles.”
Insofar as the fittings for sailboats, as described above, are base metal mountings and fittings, they are provided for by the terms of heading 8302, HTSUS, as “base metal mountings, fittings and similar articles”. Since they are base metal mountings and fittings for boats provided for by the terms of a heading, 8302, HTSUS, they are thereby excluded from classification under heading 7326, HTSUS.
Prior CBP Rulings in support of classification under heading 8302, HTSUS, include: HQ 088944, dated July 22, 1991; HQ 950059, dated October 21, 1991; (NY) N037298, dated September 23, 2008; (NY) L82684, dated March 3, 2005; and (NY) N005816, dated February 1, 2007.
The fittings for sailboats under protest also include merchandise referred to as roller fittings, which are imported in an unfinished condition. In the case of unfinished articles, it is appropriate to examine GRI 2(a), which is provided below.
GRI 2(a) provides as follows:
2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article.
It shall also include a reference to that article complete or finished (or falling to be
classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
* * * * *
The unfinished roller fittings are blanks since they are not ready for direct use but have the approximate shape and outline of the finished article, and can only be used for completion into the finished article. Although the roller fitting is imported in an unfinished condition, the amount of work required to finish the article is limited. Therefore these unfinished roller fittings have the essential character of the finished article for purposes of GRI 2(a). In accordance with all of the discussion above, and GRI 2(a), the roller fittings, for all the same reasons as the fittings for sailboats described above, are classified under heading is 8302, HTSUS. Since the roller fittings are made of steel, they are classified by the terms of the subheadings, under subheading 8302.49.60, HTSUS.
Claim of Treatment
The protestant has made a claim of treatment for classification of substantially identical shackles under subheading, 7326.90.85, HTSUS. The protestant has submitted CBP Form 29s which show the action taken by CBP in 1996 with respect to classification by CBP under the HTSUS of substantially similar merchandise, and such forms identify specific entry numbers and name the CBP import specialist (Customs officer) involved. The protestant has submitted a list of entry numbers and ports of entry for merchandise entered under the claimed treatment tariff classification covering a period from May 7, 2004, through June 17, 2008. There are at least three ports of entry included in the list of entries provided. The protestant has submitted a spreadsheet that shows the quantity and value of the merchandise entered under the claimed treatment tariff classification for years 2004, 2005, 2006, 2007, and 2008. The protestant has submitted representative entries from the two year period immediately preceding the claimed treatment tariff classification. The information provided covers the two year period immediately preceding the claim of treatment.
The protestant asserts specifically that in 1996, the CBP import specialist made classification determinations, to include for the fittings. The protestant asserts that import specialist was the person in charge of HTSUS Chapters 73 and 83 at the Port of Hartford, and was the person in charge of reviewing importations made by Wichard. The protestant asserts, that in 1996, protestant’s counsel for customs matters and the president of Wichard at that time, met with the responsible CBP import specialist. Then protestant’s counsel for customs matters prepared a memorandum based upon the guidance provided by the CBP import specialist, and provided it to the Wichard president. The protestant asserts that the proposed classifications were provided to the
CBP import specialist, who made some modifications. The Wichard president sent a letter to protestant’s counsel with the final classifications approved by CBP for the Wichard articles, and submitted a copy to the CBP import specialist. Protestant asserts that all of the shackles on the final list, with the exception of the titanium shackles, were approved by the CBP import specialist for classification under subheading 7326.90.85, HTSUS. At that time, the protestant proceeded to enter its shackles in accordance with such classification.
Protestant’s counsel for customs matters in 1996, has submitted a declaration statement, dated October 29, 2010, in support of the assertions above. Protestant’s counsel has also included statements in his declaration that state the following. In 1996 all of Wichard’s entries were filed at the Port of Hartford, CT. The CBP import specialist at the Port of Hartford in 1996 is now deceased. The CBP import specialist issued several Requests for Information (CF Form 28s), and Notices of Action (CF Form 29s) to Wichard. Protestant’s counsel consulted with the CBP import specialist during the period of approximately August to October 1996 regarding the classification of Wichard’s shackles. Protestant’s counsel and the Wichard president, met with CBP officers on September 20, 1996 to review the tariff classifications for Wichard. Protestant’s counsel prepared a memorandum of October 11, 1996, with a marked-up copy of the 1996 price list and forwarded them to Wichard’s president. The proposed classifications were subsequently forwarded to the CBP import specialist, who made some changes. On November 7, 1996, Wichard’s president sent a letter that included the list of classifications approved by CBP to protestant’s counsel with a copy to the CBP import specialist. All of the shackles, with the exception of the titanium shackles, were classified under subheading 7326.90.85, HTSUS, on such list. Based upon such list of Wichard articles, WIchard proceeded to enter its merchandise, in accordance with the classifications therein, to include the shackles under subheading 7326.90.85, HTSUS. Thereafter, Wichard continued to enter its shackles under such classification.
Protestant’s customhouse broker since 2000, has submitted a declaration statement, dated October 29, 2010, that states the following. Protestant’s customhouse broker, was informed of the classifications previously used for shackles by Wichard, and proceeded to enter all of Wichard’s shackles under subheading 7326.90.85, HTSUS, with the exception of the titanium shackles, until July 1, 2008, when CBP instructed Wichard to enter the shackles under subheading 8302.49.60, HTSUS. Protestant’s customhouse broker has provided entry information and representative entry documents through protestant’s counsel that does cover the period of two years preceding the protested entry.
The protestant has asserted a claim of treatment pursuant to 19 U.S.C. § 1625. An importer that substantiates its claim of classification treatment under 19 U.S.C. §1625(c)(2), is entitled to liquidation of the entries under the classification that received treatment by CBP, here that is subheading 7326.90.85, HTSUS.
Section 177.12(c)(1) of the CBP (19 CFR § 177.12(c)(1)) provides that the following rules will apply for purposes of determining whether a treatment was previously accorded by CBP to substantially identical transactions of a person: (i) There must be evidence to establish that:
(A) There was an actual determination by a Customs officer regarding the facts
and issues involved in the claimed treatment;
(B) The Customs officer making the actual determination was responsible for the subject matter on which the determination was made; and
(C) Over a 2-year period immediately preceding the claim of treatment, Customs consistently applied that determination on a national basis as reflected in liquidations of entries or reconciliations or other Customs actions with respect to
all or substantially all of that person's Customs transactions involving materially identical facts and issues.
Section 177(c)(ii) provides that the determination of whether the requisite treatment occurred will be made on a case-by-case basis and will involve an assessment of all relevant factors. Section 177.12(c)(2)(iv) of the CBP Regulations, 19 CFR 177.12(c)(iv)), provides that “(t)he evidentiary burden as regards the existence of the previous treatment is on the person claiming the treatment.” Section 177.12(c)(iv), further states the following:
The evidence of previous treatment by Customs must include a list of all materially identical transactions by entry number (or other Customs assigned number), the quantity and value of merchandise covered by each transaction (where applicable), the ports of entry, the dates of final action by Customs, and, if known, the name and location of the Customs officer who made the determination on which the claimed treatment is based.
The protestant has submitted Notices of Action (CBP Form 29s) from 1996 that demonstrate a Customs officer made a determination and took action with respect protestant’s importation of substantially similar merchandise. Thereby, the protestant has submitted evidence to establish that there was an actual determination by a Customs officer regarding the facts and issues involved in the claimed treatment. The declarations submitted on behalf of protestant provide evidence that the Customs officer actually making the determination was responsible for the subject matter and was well informed by the importer through continuous contact and informed responses to CBP requests for information. Moreover, the CBP Form 29s identify specific entry numbers,
the port of entry, the dates of action, and the CBP officer who made the determination, upon which the claim of treatment is being made. The protestant has submitted a list of entry numbers (and representative entry documents), the ports of entry, the quantities, and values for merchandise entered under the claimed treatment tariff classification covering the two year period preceding the claimed treatment tariff classification.
The protestant has submitted declarations from the protestant’s customhouse broker on behalf of protestant’s entries of merchandise since the year 2000, which provide evidence that CBP has consistently applied the asserted treatment for a period extending from 2000 until July 2008, which also covers the two year period immediately preceding the merchandise subject to the claim of treatment.
In light of the evidence submitted by protestant, the protestant has substantiated its claim of treatment under 19 U.S.C. §1625(c)(2) for the importation of shackles under subheading 7326.90.85, HTSUS.
HOLDING:
By application of GRI 1, and taking into consideration the relevant ENs at headings 8425, and 8479, the subject merchandise, specifically the manual reefing and furling systems, as described above, are articles that are classified under the terms of heading 8479, HTSUS, and are classified under the terms of subheading 8479.89.98, HTSUS, which provides for, “Machinery and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and mechanical appliances: Other: Other: Other.” The column one, general rate of duty for merchandise of heading 8479.89.98, HTSUS (2008), at the time of entry, was 2.5%, ad valorem.
By application of GRI 1, the subject merchandise, specifically the fittings for sailboats, as described above, to include the snap shackles, captive pin shackles, self locking shackles, and by application of GRI 2(a) with respect to the roller fittings, are articles that are classified under the terms of heading 8302, HTSUS, and are classified under the terms of subheading 8302.49.60, HTSUS, which provides for, “Base metal mountings, fittings and similar articles suitable for furniture, doors, staircases, windows, blinds, coachwork, saddlery, trunks, chests, caskets, or the like; base metal hat racks, hat-pegs, brackets and similar fixtures; castors with mountings of base metal; automatic door closers of base metal; and base metal parts thereof: Other mountings, fittings and similar articles, and parts thereof: Other: Other: Of iron or steel, of aluminum or of zinc”. The column one, general rate of duty for merchandise of subheading 8302.49.60, HTSUS (2008), at the time of entry, was 5.7%, ad valorem.
However, with respect to the subject importer, Wichard Inc., and the subject protest, since the evidence submitted by protestant has substantiated its claim of treatment under 19 U.S.C. §1625(c)(2) for the importation of shackles under subheading 7326.90.85, HTSUS, the protestant is entitled to liquidation of such merchandise for the subject entry under such subheading.
The protest should be denied in part, with respect to the reefing systems, and granted in part, with respect to the fittings subject to treatment. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter.
Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the sanitized decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division